Australia's central bank warns further hike 'quite possible' after holding rates steady

By Stella Qiu and Wayne Cole

SYDNEY, Aug 11 (Reuters) - Australia's cardinal slope held its currency complaint dependable astatine 4.35% for a 2nd consecutive gathering connected Tuesday, saying the system was slowing arsenic expected, but warned it mightiness hike again if ‌needed to power inflation.

Reserve Bank of Australia Governor Michele Bullock struck a hawkish code astatine the post-meeting property league by saying ‌that she personally thought it was "quite possible" that rates whitethorn request to spell up again, keeping live the hazard of a 4th complaint summation this year.

Wrapping up the August ​policy meeting, the RBA said aggregate request needed to enactment subdued to trim capableness pressures, and it would bash what was indispensable to bring ostentation backmost to target, including expanding the currency complaint people further if upside risks materialise.

Markets had wagered connected a dependable result fixed ostentation information had travel successful nether forecasts successful the 2nd quarter, portion the lodging marketplace had weakened much than policymakers had expected.

Bullock said dissimilar successful June, a complaint hike ‌was discussed this clip amid the re-escalation successful ⁠the Middle East conflict, and the committee was reasoning hard astir erstwhile it mightiness beryllium due to rise rates.

"And we volition spell again if we request to. And I deliberation personally that it is rather imaginable we ⁠might request to go, but we volition hold and spot what the information tells us," said Bullock.

The RBA has already raised rates by 75 ground points this twelvemonth — afloat reversing the magnitude of argumentation easing from 2025 — arsenic it struggled to incorporate stubborn inflationary pressures successful the system driven by surging vigor ​costs.

Bullock said ​last period that a further slowdown successful the system whitethorn beryllium required to ​bring ostentation down.

Tuesday's unanimous determination was mostly arsenic expected. ‌The Australian dollar was level astatine $0.7055, portion 3-year authorities enslaved yields roseate 2 ground points to 4.572%.

After Bullock's hawkish comments, swaps present connote astir a 50% accidental of a complaint summation successful November, portion pricing successful 80% likelihood of a determination by aboriginal adjacent year.

HOUSING SLOWDOWN

Higher borrowing costs brought a grounds roar successful the lodging marketplace to an abrupt end, with tumbling auction clearance rates, a plunge successful indebtedness applications and a slump successful income signalling pugnacious conditions ahead.

However, user spending stayed solid, the labour marketplace kept churning retired much jobs and the caller re-escalation of ‌the Middle East struggle kept policymakers wary of pass-throughs from higher lipid prices ​to different parts of the economy.

The intimately watched second-quarter ostentation information amazed connected the downside, ​giving the RBA country to clasp occurrence this month.